The figure below shows the market equilibrium (point B) at the intersection of demand and supply curves under perfect competition. Figure 10.5
D: Market demand curve
S: Market supply curve
-Assume that in Figure 10.5,the market is originally perfectly competitive but then becomes a monopoly.Compared with perfect competition,a monopoly would have:

Question

The figure below shows the market equilibrium (point B) at the intersection of demand and supply curves under perfect competition. Figure 10.5

D: Market demand curve
S: Market supply curve
-Assume that in Figure 10.5,the market is originally perfectly competitive but then becomes a monopoly.Compared with perfect competition,a monopoly would have:

Quizplus · Accepted Answer

When the market changes from perfect competition to monopoly, the monopolist will be able to charge a higher price (Pm) compared to the perfect competition price (Pc). The new quantity produced will be less than the competitive quantity (Qm<Qc). This results in a deadweight loss, which is the loss of consumer and producer surplus that occurs due to the reduction in output compared to the competitive level. Therefore, the best choice is D.

The Figure Below Shows the Market Equilibrium (Point B) at the Intersection